Besides stamp duty on gift deed, duty on conveyance deed was also hiked in rural and peri-urban areas of the state.

MUMBAI: In a major u-turn, the state government on Thursday revoked the decision to hike stamp duty on gift deeds which was passed by the state cabinet two days ago.

On Tuesday the state cabinet had amended the Maharashtra stamp duty act and had hiked the stamp duty on gift deeds from Rs 500 to 3% of the land value. On Wednesday night, revenue minister Chandrakant Patil issued a statement saying that no such decision was taken in the cabinet and that it was a case of "miscommunication" which led to the confusion and subsequent new reports.

Patil also said that the government had decided to do away with the stamp duty on gift deeds in 2015 and had reduced it to just Rs 500. "There is no change in that decision, we are infact making losses of Rs 500 crore because of the decision but yet we are not increasing the duty," said Patil. The government was hoping to make an additional Rs 300 crore from the decision. Cash strapped state government is looking at ways to increase its revenue.

A gift deed is made when a property is transferred to a blood relative. The decision to do away with the stamp duty in 2015 was taken by the controversial former revenue minister Eknath Khadse. Before his decision the government was charging 2% stamp duty.

The roll back on the gift deed has not appeased the warring ally -Shiv Sena. Besides stamp duty on gift deed, duty on conveyance deed was also hiked in rural and peri-urban areas of the state.

Sena had attacked the government on their decision on Wednesday and has also demanded on a complete roll back of the duty that has been hiked on conveyance deeds as well.

Minister Diwakar Raote had even shown his displeasure in the cabinet meeting while the issue was being discussed. Shiv Sena minister Ramdas Kadam on Wednesday in a press conference threatened to take to the streets if the decision was not rolled back soon.

"The government has not touched stamp duty for conveyance deed in Mumbai city but has raised it in rural areas by 1%. However poor people from rural areas should not be burdened by this hike so we demanded to roll it back," added Raote.

Officials from the department said that there was a confusion within the government on this issue. "The 2015 decision to slash stamp duty was only on residential and farm land which would be transferred to blood relatives. It didn't cover other type of properties. For any other property type the stamp duty was 2%. The government is now trying to show that the increase in stamp duty will be only on the properties which were already paying 2% and that the hike has been only by 1%," said an official.

However, the minutes of the cabinet will be finalized in the meeting next week and that's when the government will make clear its stand in the cabinet.